from the everybody-pony-up dept

Declan McCullagh has a great post pointing out Congressional Republicans' recent flip-flop on antitrust scrutiny of big corporate mergers. During the telecom consolidations of the last few years, powerful Republicans like Joe Barton and Fred Upton pressed regulatory agencies to approve the mergers quickly with minimal scrutiny. But now that Google wants to buy DoubleClick, House Republicans have gotten the antitrust religion. A letter signed by 12 Republican Congressmen, including former House Speaker Denny Hastert, demands that the House commence hearings on the Google-DoubleClick proposal because "the privacy implications of such a merger are enormous." As Declan astutely observers, the telecom companies that Republicans waved through last year gave generously to Republican legislators, whereas Google's board and senior executives have tended to give to Democrats. It seems like there might be a connection there.

As troubling as this behavior is, we shouldn't be too surprised. Antitrust law was supposed to be about preventing any one company from accumulating excessive market power, but regulators have long been in the habit of considering factors far afield from the proposed company's market share. Earlier this year, 70 Congressmen urged the FCC to block the XM-Sirius merger on the laughable theory that the merged company wouldn't have any competition, an argument that was being pushed primarily by XM and Sirius's many competitors in the terrestrial radio business. And last fall the two Democratic members of the FCC used the AT&T-Bell South merger as a pretext to force AT&T to accept network neutrality rules for 30 months, despite the fact that antitrust law doesn't say anything about network neutrality.

Even if you like network neutrality rules or are worried about the privacy implications of the DoubleClick deal, you should be even more troubled at the way this ad hoc process undermines the rule of law. It's Congress's job to pass new regulations on subjects like network neutrality and privacy. When Congress passes legislation, it applies equally to everyone in the industry, limiting favoritism. But the way the antitrust process currently works gives politicians and bureaucrats the opportunity to single out individual companies for special treatment. If a company hasn't given enough campaign contributions to the right members of Congress (as XM and Sirius hadn't), its merger request is likely to be weighed down with a raft of burdensome conditions, or denied altogether on spurious grounds. Behavior like we've seen from the House Republicans will be commonplace as long as regulators have virtually unchecked authority to approve or reject mergers.

from the now-answer-this dept

This week, we pointed to a report that predicted the FTC would block Google's acquisition of DoubleClick on antitrust grounds. This particular case notwithstanding, the report's author made the argument that Google was likely to replace Microsoft as the chief target of antitrust enforcers. That prediction could be coming to fruition very quickly. In addition to the FTC's scrutiny of the deal, Congress has decided to drag Google in front of a committee to discuss the deal. This doesn't spell doom for the deal just yet, but it does suggest that politicians are growing wary of Google's power, in the same way they had concerns about Microsoft. It's no wonder the company has been busily beefing up its forces in Washington.

from the forget-what-ya-heard dept

Two of the big pending M&A deals right now are Google's purchase of DoubleClick and the proposed tie-up between XM and Sirius. In the case of Google and DoubleClick, it's been assumed that the deal will clear regulatory muster, despite opposition to it from Microsoft. The Sirius-XM deal, however, has been seen as a longshot, in part because of the aggressive opposition to it from terrestrial broadcasters. But two new reports are pouring cold water on the conventional wisdom. An analyst at Bear Stearns believes that the satellite radio deal is looking increasingly likely, a conclusion arrived at by monitoring hearings and reviewing FCC documents. Meanwhile, a Washington policy expert believes that the FTC is likely to block the DoubleClick deal (via Tech Trader Daily), in light of the high concentration of online advertising power that Google would obtain through the deal. Whether you agree with his conclusion or not, he does argue persuasively that this market has indeed become quite concentrated. He also ends with the seemingly inevitable conclusion that Google is set to replace Microsoft as the chief target among the antitrust set.